Australia's rental market barely changed in May, research shows.
New data from SQM Research has revealed that despite a rise in the number of available homes from 35,258 to 37,844, the national vacancy rate remained at 1.2 per cent.
While vacancy rates rose in several capital cities, conditions remain tight overall, with all capital cities continuing to record vacancy rates below 2 per cent.
SQM Research managing director Louis Christopher suggests the lift was to be expected, given the time of year.
"Where vacancies did rise across a number of cities, that largely reflects normal seasonal patterns May and June are typically among the higher-vacancy months of the year, outside the December peak, as leasing slows over the cooler months", Christopher said.
“On a year-on-year basis the market is unchanged, sitting at the same 1.2 per cent as it did in May last year."
Indeed, the report shows that Australia’s rental market follows a consistent seasonal rhythm. Nationally, vacancies are typically highest in December, when year-end turnover lifts listings, and tightest in February and March, as strong start-of-year demand absorbs available stock. The effect is far larger in some markets than others. Beachside and holiday locations show the strongest swings: in Bondi, for instance, the long-term vacancy rate troughs near 2 per cent across spring and summer — when holiday-letting demand peaks and owners favour short-stay letting — then climbs to around 4 per cent by June as that stock returns to the long-term pool for winter. Averaged over the past decade, winter vacancies in Bondi run roughly 60 per cent higher than over summer, and the same pattern is visible across the Gold Coast.
The reverse holds in the tropical north: in Darwin, vacancies fall to their lowest over the dry-season winter, when demand peaks, and rise through the wet-season summer. Much of the month-to-month movement in headline vacancy rates reflects this seasonal rotation of stock rather than any genuine change in housing supply.
Nevertheless, national advertised rents continued to rise through June, with combined rents increasing 0.4 per cent over the past 30 days and 7.8 per cent higher year-on-year, highlighting ongoing pressure in Australia’s rental market.
The national combined rent average now stands at $700.04 per week, while the capital city average has increased to $797.37 per week, supported by ongoing growth across most capital cities.
Nationally, house rents rose 0.5 per cent for the month and 8.2 per cent over the year, while unit rents increased 0.3 per cent monthly and 7.3 per cent annually, reflecting sustained demand for both detached housing and medium-density accommodation.
According to Christopher, the real issue is that Australia’s rental market remains fundamentally undersupplied.
“Without a substantial increase in housing construction and rental stock, and/or a meaningful decrease in population growth rates from current levels, affordability pressures are likely to persist through the remainder of 2026 and into 2027”, he concluded.